The seven secrets of a happy life

By Nick Powdthavee and Carl Wilkinson

Many of us struggle to find real happiness. Why is that? Studies in psychology suggest that part of the reason is that most of us are very bad at predicting how we’ll react when faced with many of life’s experiences. Consequently, we end up making choices that are potentially harmful to our emotional well-being. According to Harvard psychologist Daniel Gilbert, we tend to overestimate, by a long way, the extent and duration of the emotional impacts of, say, a pay rise, the death of a loved one, or even moving to an area that’s sunny all year round. This is simply because, when we’re trying to imagine how an experience will affect us emotionally, we tend to focus too much of our attention on the most salient features of the experience in question.

In our minds, Los Angeles = sunny weather; money = nice cars and luxurious holidays. In reality, however, the many other less salient features that we often fail to consider will have emotional consequences. Los Angeles, for instance, is actually thousands of miles away from our friends and family; we need to work harder in order to earn more. This explains why happiness often eludes us when we blindly follow our imaginations or what conventional wisdom tells us about what makes us happy.

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So where should we look for happiness? New research in psychology and economics suggests the answer lies in what we already have – things like friends and family. The secret to being happy is simply to devote more of our time and attention to these happiness-rich and fulfilling experiences.

As the US rabbi Hyman Schachtel once famously said: “Happiness is not having what you want, but wanting what you have.”

1. Money buys you little happiness

One of the most infamous findings in happiness research is that money doesn’t buy a lot of happiness – or at least not as much as we think it should. According to the economist Richard Easterlin, part of the reason for this is that we care a great deal more about what other people earn than what we do ourselves.

For those whose most basic needs are already met, money buys additional happiness only if it can lead to higher status in society, which is hard when everyone else is also getting richer over time. Since people’s comparison group varies from place to place, those living in more affluent areas of London, for example, would probably need to earn at least £200k a year to ensure that they are staying well ahead of most other Londoners – and even that might not be enough.

Moreover, according to the Princeton University psychologist Daniel Kahneman, the weak relationship between happiness and income can also be explained, in part, by the evidence that richer people tend to spend more time engaging in activities associated with no greater happiness, on average, but with slightly higher tension and stress – such as work, childcare and shopping. By contrast, people with lower incomes tend to spend more time engaging in happiness-rich experiences such as socialising with friends and other passive leisure activities such as resting and watching TV.

However, when these high- and low-income earners are prompted to think about the impact of income on their happiness, both tend to focus more on the conventional possibilities of money when evaluating its effects. This leads to the conclusion that life must be significantly happier for the rich than for the poor.

The truth is quite the opposite: poorer people can – and often do – lead significantly happier lives than the rich.

2. Friends are worth more than a new Ferrari

How much money is enough to make us happy? Because the effect of income on our happiness depends largely on how much money our colleagues, neighbours and friends earn, it’s difficult to say. Yet it’s easier to say how much extra money is required, on average, for a socially isolated person to be just as happy as a socially active person – no more, no less.

The calculation of prices of various non-marketable goods such as the joy of friendship or marriage, first put forward in the early 1990s by the University of Warwick economist Andrew Oswald, is based on a very simple idea. Imagine that, on average, money makes people happy. Imagine also that people who see their friends every day are significantly happier than those who live in isolation. In principle, then, it’s possible to calculate how much extra income would have to be given to someone to compensate exactly for the lack of social life.

In Britain, for example, a pay rise of £1,000 is associated with an increase in happiness of approximately 0.0007 points on a self-reported seven-point happiness scale. Seeing friends more often, on the other hand, is associated with an increase in happiness of approximately 0.161 points. What this implies is that swapping a sociable life for an isolated one requires a pay rise of approximately 0.161/0.0007 – roughly £230,000 a year. That’s a little more than a new, gleaming Ferrari 612 Scaglietti.

3. Winning the lottery won’t make you instantly happy

One of the most surprising findings in recent research shows that a lottery win of £1,000 or more won’t immediately make you happy. Instead, it takes two years before winners enjoy their money. This is in stark contrast to the effect of earned incomes on happiness: an increase in salary often leads to some immediate improvement (again, not as much as one would think) in a person’s happiness. But why does the joy from a lottery win take two years to arrive? One hypothesis is that, while traditional economic theories typically assume that a pound is a pound is a pound, the reality is that one pound won is not the same as one pound earned.

From new research on “lagged deservingness” among lottery winners that I undertook with economists Andrew Oswald and Rainer Winkelmann, earned income is regarded as money that is intrinsically deserved. Lottery income isn’t. The winner doesn’t immediately think that she is fully deserving of the money because winning the lottery creates a form of unwanted cognitive dissonance – the process associated with holding two contradictory ideas in one’s head. The winner thinks: “I’m happy about the money, but I’m not sure whether I’m really entitled to it.” Through time, however, the lottery winner can persuade herself that she deserves the money. Empirically speaking, this slow erosion of cognitive dissonance takes approximately two years to complete. Interestingly, we also found in our study that people weigh differently the various incomes that accrue to them: gift income and inheritance income are viewed in a very different way to wage income and lottery income.

A pound is not just a pound.

4. Losing your job makes you unhappy – but less so when others have too

Losing your job is one of life’s most miserable experiences – more so than getting a divorce. One reason for this is obvious: unemployment removes a constant stream of income. Even so, the unemployed also report substantially lower levels of happiness relative to those who are employed but have the same income. The psychic cost of unemployment can in part be explained by the social stigma and loss of self-esteem job loss entails.

There is a flipside to this, though. While unemployment lowers well-being for both the unemployed and the employed (perhaps by creating expectations of job loss), its effect on those already unemployed is notably reduced when a lot of other people – colleagues, neighbours, people living in the same region or even in the same household – are also unemployed.

The reason is simple, argues the economist Andrew Clark of the Paris School of Economics. Where being unemployed is the norm, the impact on your reputation caused by job loss is lessened. In other words, it feels relatively OK to be unemployed when a lot of others are also unemployed.

In fact, the well-being gap between the employed and the unemployed actually ceases to exist if the unemployment rate is high enough. Average happiness is typically lower in high-unemployment areas relative to low-unemployment areas. Yet, in the UK this happiness gap disappears completely when the average regional unemployment rate tops 20 per cent. Bad things don’t seem so bad when you’re not alone in experiencing them.

5. Fat friends make you happier than thin ones

New evidence in economics and epidemiology seems to suggest that we care about other people’s weight as much as we do our own. It’s always more desirable to be slim – perhaps because it offers a better chance of finding a person to date or marry, or even faster job promotion. However, when the people we normally compare ourselves with become fatter, the cost of putting on weight for many of us reduces. Put simply, when other people around me become fatter, I don’t have to compete so much with them to stay slim.

According to research conducted by economists David G. Blanchflower, Andrew Oswald and Bert Van Landeghem, people with weight problems – those with a body mass index (BMI) of 30 or over – are significantly unhappier than people within a healthy weight range (BMI 18.5–25). However, the overweight tend to report higher levels of happiness when other people of the same age and gender are as heavy or heavier than they are. The same also goes for individuals who live in the same household: our own weight doesn’t bother us as much, that is, when our partner is also putting on weight.

This positive relationship between our happiness and other people’s weight provides a good psychological explanation for the current obesity epidemic in the west. It’s psychologically easier for us to accept being overweight when everyone else is also overweight – assuming, of course, that most of us enjoy food a lot more than dieting.

6. Divorce can make you happy

At any given point in time, those who are divorced tend to report, on average, significantly lower levels of happiness than people who are married. While this result is probably unsurprising to many people, such cross-sectional comparisons between two groups of individuals at the same point in time can often lead to severely misleading conclusions – in this case, that divorce makes people unhappy.

For one thing, the choice to dissolve a marriage is a rare decision for any individual to take, and one that’s unlikely to have been made entirely on a whim. One could even argue that divorce must make people happy given that one would only go through with it if the benefits of doing so outweighed the costs. This leads to an important question: what happens to people’s happiness in the periods before and after divorce?

According to the psychologist Ed Diener, the worst moment for men is the year preceding the divorce. By contrast, the worst moment for women is two years before the divorce, with their happiness on the verge of bouncing back the year preceding the split. This pattern probably reflects the fact that the majority of divorces are initiated by the wife.

After a divorce, it then takes approximately two years for men and three years for women for the effect of the break-up on happiness to become positive and stay positive. In other words, it seems that divorcing couples often become significantly happier with their lives by breaking up.

7. Happiness is contagious

There are many benefits to being happy. Happier people tend to be healthier, live longer and earn more. They also tend to volunteer more, be better at relationships and smile more of what psychologists call “Duchenne” or genuine smiles. Less well understood is why happiness is contagious.

According to James Fowler and Nicholas Christakis, authors of the international bestseller Connected, people surrounded by many happy friends, family members and neighbours who are central to their social network become significantly happier in the future. More specifically, they say we will become 25 per cent happier with our life if a friend who lives within a mile of us becomes significantly happier with his or her life.

Similar effects are seen in co-resident spouses (8 per cent happier); siblings who live within a mile of each other (14 per cent); and next-door neighbours (34 per cent). What this implies is that the magnitude of happiness spread seems to depend more on frequent social contact (due to physical proximity) than on deep social connections. Alas, for some reason this doesn’t translate to the workplace.

So, why is happiness contagious? One reason may be that happy people share their good fortune with their friends and family (for example, by being pragmatically helpful or financially generous). Another reason could be that happy people tend to change their behaviour for the better by being nicer or less hostile to those close to them. Or it could just be that positive emotions are highly contagious.

In short, happiness is not only desirable for personal reasons; its pay-offs can also be of unimaginable value to society as a whole.

Nick Powdthavee is a behavioural economist and author of ‘The Happiness Equation’ (Icon Books), which is available now

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Marcus du Sautoy, 46, mathematician

Marcus du Sautoy, pictured with Ina, one of his twin daughters, gets great happiness from playing football

What really does it for me is spotting patterns; it’s what mathematics is all about. Working on a mathematical problem and getting that “Aha!” moment when things fit together makes me very happy. It causes a surge of dopamine in my head.

Mathematics offers something very fundamental about the universe, and the appeal of solving problems is partly because they’re eternal. Looking back on the discoveries that I’ve made gives me an intense feeling of happiness; I know they’re going to outlive me. I believe we’re all mathematicians at heart. The brain is programmed to look for patterns – it’s how we know something is significant.

In some sense, mathematics informs the way I run my life. Mathematics is not the answer to everything, but it can help you to plan a better path. Recognising patterns that make you happy or unhappy and repeating or avoiding them is an inherently mathematical trait.

I think the things that make me happy in life often have an underlying mathematical structure. Listening to music increases my levels of happiness because on some level I’m enjoying its patterns. Playing football also makes me incredibly happy. I rarely score a goal because I’m a bit of a defensive midfielder, but the few times I have it’s given me a huge surge of happiness. Tension is built up and then has a resolution; it’s the same for all the things that give me happiness: maths, football and sex.

There’s an element of personal glory in all of this but it’s also about the sense of contributing to a community. I couldn’t do maths in isolation. I need my community of mathematicians to validate what I do.

I think that you can’t really experience happiness without being unhappy. We had a child who died during delivery and my wife almost died, too. It was incredibly traumatic and I questioned what I wanted from my life. Did I want it to be just a flat line of mediocrity? No, what I love about life is its highs, but that will involve lows. Life is about taking risks.

In mathematics it’s the same. You take risks and there are depressing times when nothing works, but it does make those times when it does work so much more satisfying.

I’ve been working on a conjecture for the past 10 years, and if I could solve it I think I would be very happy. It’s not one of the five famous conjectures for which there is a $1m prize attached. Money is not the driving force for me. Most mathematicians would pay a million dollars to be able to solve any one of those problems. In fact, I’d rather have more time than more money; time is the factor that really increases happiness.

Marcus du Sautoy’s book ‘The Number Mysteries: A Mathematical Odyssey Through Everyday Life’ is published by Fourth Estate

Sam Clark, who runs the restaurant Moro with her husband, believes her happiness is reflected in her cooking

Sam Clark, 40, restaurateur

My love of food stems from an early age. I loved eating things on my own and discovering how food works – the different ways in which you can eat a Jaffa Cake, how a banana naturally divides lengthways into three segments or the fact that a cucumber’s seeds taste different from the rest of it. I thought about how food is put together and how taste and texture works.

As I grew older, that pleasure was realised through cooking for friends and then customers at Moro, the restaurant I run with my husband, Sam. I never made the conscious decision to work in a restaurant – I fell into it. I studied languages at university, but I have always cooked for people and enjoyed it. I had a bit of a reputation for cooking, but it wasn’t until I fell into a job that I realised it was exactly what I should be doing – it felt natural and right.

The happiest moment of my life was when I met Sam. I was cooking at The Eagle pub in Farringdon and he came to work as a cook. He’d been at the River Café, as I had, and I’d heard about him because we have the same surname. It’s corny, but he made me very happy. I really wanted to find someone like-minded, someone who enjoys food. I couldn’t imagine going out with someone who wasn’t as passionate about food as I am. When Sam came along, it was without question my happiest moment. We set up Moro two or three years later.

The restaurant’s now in its 13th year and the feedback from people is always very positive; they really enjoy being in the restaurant and eating the food. We cook a little less at home during the week now because we’ve been cooking at work and over the years we’ve become more professional in the way we approach it. But cooking remains our passion, it’s what makes us happy – people respond to that.

Generally, I’m a happy person. I’m extremely lucky to be doing what I love. If you’re not happy, you can’t get up every day and go into the restaurant and inspire the staff. If you’re not in a happy place, then they certainly won’t be. I think I can confidently say that the staff are happy.

You can’t be happy all the time; anyone who says they are is lying. If you don’t experience unhappiness, then how can you experience happiness? If Sam or I are unhappy, it’s hard for the other to be happy, or if the children are unhappy, then we can’t be happy. We work pretty hard and it is difficult to balance a busy restaurant where we have 50 people working all of whom need to feel valued, as well as home life and young children. The balancing act is not an easy one and I don’t do it perfectly all the time. It’s quite demanding.

Over time, what makes me happy has changed. It’s the smaller things that make me happy now – not aspiring to own the world. Having a family changes things too. If my family is happy and the restaurant is happy and people are thriving and enjoy working, that for us is enough. We don’t need to earn millions of pounds; that’s not what we’re after.

For us, it’s all about the food. We really care about trying to make the food as good as it can be. There are two services each day and you’re under scrutiny. People notice. Of course some things are not perfect, our recipes are not written down to the exact gramme so we rely on our chefs. But I think the whole parcel – the restaurant, the food, the people, the atmosphere – it’s very stimulating. Sam and I are quite different, but we have a shared goal: we’re both very passionate about the restaurant and the food, and that’s what makes us happy.

Morito, a new tapas bar, opens in September next door to Moro, at 32 Exmouth Market, London EC1

Sir Tom Hunter, 49, billionaire and philanthropist

For Sir Tom Hunter, happiness is having a laugh in the chip shop with the people he grew up with

You will never hear me complain about having too much money. I’m euphoric! Having a certain level of wealth gives you security.

I’m definitely happier now than when I started out in business. I wasn’t unhappy then, but there was plenty of uncertainty. Now my life’s pretty mapped out. I’m not saying there aren’t challenges, but I feel I can deal with it all. I have contentment and although that’s not the same as happiness they go hand in hand.

I’m a naturally optimistic and positive person. In my experience people with a positive attitude to life are happier and achieve more. I sold my first business, Sports Division, in 1998 when I was 37. I got a cheque for £260m and thought: “I’m so privileged and so lucky, I can easily take care of my family, I don’t need all this money.” I took a few years out to educate myself and work out what I wanted to do. I needed a reason to keep working – and if the reason isn’t money, what is it? Philanthropy and business came together: I need to make money in order to invest it in philanthropy.

I don’t see what we do as giving money away. We want a return. We view it through pretty much the same equation as our business life. The return in business life is profit, but the return in philanthropy is something else.

I recently came back from Malawi where we’ve built a maternity ward. Rates of infant mortality and mothers dying in childbirth have gone down. Seeing the hospital finished and operational gave me a bigger high than any business deal I’ve ever done.

I don’t want to come across as Mother Teresa, because I’m not. But I wouldn’t feel right if my money was just left to my kids. I don’t think it’d bring them happiness … they may disagree. I think giving money away allows me to enjoy having wealth.

Prior to the credit crunch, philanthropy took up perhaps 30 per cent of my week. Now it’s more like 10 per cent. I’ve had to go back to making more money, but I’d like to get to a position where the balance between business and philanthropy was 50:50.

The credit crunch has brought back a sense of reality for me. Some of the things we’d taken for granted, like going on holiday, we’re beginning to really appreciate again. We’ve realised our family time is precious and we’ve got to make the most of it.

I’ve been very lucky, and while happiness is being able to go to great places on holiday, it’s also having a laugh down the chip shop every Sunday night with the people I grew up with.

I hope making money hasn’t changed me, but I’m not really the best person to judge.

‘Happiness is making music,’ says Pixie Lott (pictured with her mother, Beverley). Lott is most content when in the studio or on stage

Pixie Lott, 19, musician

Music, for me, is medicine. I’m at my happiest when I’m on stage or making music in the studio. Writing songs really does feel like therapy. Even just listening to music makes me happy. If I’m in a terrible mood, I just put my iPod on – the louder the better – and it instantly turns me around.

I don’t know why, but music really connects with me. There’s always a song that matches my mood, and encapsulates moments in my life. My favourite song is “Love Come Down” by Evelyn King. It’s an old 1980s tune, but whenever I have parties at my house, or my friends come over to get ready to go out, we play it full blast. We all love it. I’ve definitely got some happy memories associated with that song.

I know songs I listen to have a powerful effect on me, but it’s weird to think that the music I make can have that effect on other people. I find it crazy to hear in letters or on Twitter the effect my songs can have. When I’m unhappy or have had an argument I’ll go straight to the piano and write a song almost while I’m crying. It’s so much better because the emotion is real. As soon as I start to get it off my chest, I feel happier. If you’re in the heat of the moment and you write a song, it definitely comes out better than if you just have to write a song today.

My album, Turn It Up, was released last year – the launch day was one of my happiest because I got to play my first headline show in London and then I had another show in Berlin on the same day. The album went to number six in the UK charts and I’ve had two number one singles and five songs in the top 20. It’s all happened so fast, but I think my idea of happiness hasn’t changed.

I guess I’m a naturally happy person. Happiness, for me, is making music, listening to music, being with my friends and going out with them and being with my family. I’m so lucky to have them; I’d feel selfish if I wasn’t happy. I’ve always had those values and they haven’t changed.

Pixie Lott’s new single ‘Broken Arrow’ is out on October 11. She is on tour in the UK from November 24

Sir Tom Hunter is founder of the private equity partnership West Coast Capital and venture philanthropy organisation The Hunter Foundation

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